Do you know how much money your business makes every month? Businesses are in the money-making business to make a profit. But if they are not careful, they may confuse income with profit. They write in a book or a spreadsheet their sales, track their income coming in/out. They total it up at the end of the day and see the total. Well, that sure isn’t the profit, it is income. So, it is imperative that you know what you make every month and compare what is coming in and then minus what is going out.
REVENUE – COSTS = PROFIT
A lot of business owners are missing out on important data and financial reports that can influence their success. Sure, they might have information about their commodities or how they link to their customers, but what they really need is to ensure their understanding of the business’ financial health.
Make it a priority to stay informed about financial tracking, and it would behoove you to hire a bookkeeper to help with the continuing tasks.
Don’t make that fatal mistake of waiting until the end of the year to formulate your financial reports. Instead, it is better to inspect productivity once a month, in order to have an understanding of your company’s financial health. By waiting even, a half-year, you might notice a problem that could have been rectified 5 months ago but now, too much time has gone by and the issue has become too big.
By being consistent with the tracking of your company’s financial health, you will see that inspecting your financial reports monthly is very advantageous to help you prevent financial ruin and make better business decisions.
You need to be proactive in keeping abreast with the financial numbers of your company to maintain success in your business.
When your management sees the tracking and publishing of the company’s numbers, they can see what is important and continue to do more of it while making the best decisions possible when it comes to the budget, critical spending, and even loan approval.
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